Investor appetite for purpose-built rental housing and senior living properties set to rapidly expand by 2024
New research has revealed that Canada, the United States, and the UK will be the primary sources of funding coming into the UK’s Residential Investment sector over the next 5 years.
Compiled by Knight Frank, the Residential Investment Report 2019 surveyed 43 of the leading investors into the sector, which represented a combined £32 billion of investments into the UK housing market.
One of the key results suggested that whilst appetite for student accommodation will remain stable, investors will increasingly target private rented sector (PRS) and senior living properties between now and 2024.
Of the 43 investors surveyed, 24 said they were actively investing in PRS schemes now, but by 2024 30 of the respondents expected they would be active in the PRS market.
Senior living in particular looks to become more popular, with 12 investors active now and more than double (27) predicted to be actively investing by 2024.
The survey’s investor respondents anticipate that both senior living and PRS properties will experience higher annual rental growth than student accommodation, by 3.2% and 2.6% compared to 2.4% respectively.
Additionally, the report revealed that Birmingham in the Midlands and Leeds in Yorkshire are expected to become the top UK cities for PRS investments, with Nick Pleydell-Bouverie, Head of Residential Investment Agency at Knight Frank saying:
“Birmingham presents an incredibly compelling investment opportunity for PRS, with a rapidly growing population, significant infrastructure and transport improvements and a structural undersupply of new-build PRS product.
“Meanwhile, Leeds is seeing the fastest private sector growth of any regional city in the UK.”
However, the latest Rental Tracker Index by Rightmove found that landlords in the North East are earning the highest rental returns in England & Wales.